7 ways to influence your audience when communicating price
Yes, there is an art to communicating pricing!
How you communicate the value of your product or service matters. One key element is obviously the price itself. When you’ve invested a lot of time and resources in determining your pricing strategy, it makes sense to convey that price in the most compelling way possible.
Human beings evaluate the price of something relatively. i.e. we find it easier to judge the value of something when we have something to compare it to. We use that comparative product as a frame of reference - a guide that helps our rational brain feel comfortable with the deal offered.
There are many methods that can help influence customers. Here are just a few to get you started:
1. Framing
Framing your price against both a cheaper one and a more expensive one helps communicate the value of your product. Called the Goldilocks effect, it’s a way of channelling the customer’s mind towards one key product.
Imagine three different price points for similar but slightly different products.
Psychology says that the smallest price is not just 'lower' than the other two but actually 'too cheap' in relation to them and, therefore, assumed to be of less value. The higher-priced product is deemed too expensive in relation to the other two. Meanwhile, the medium-priced product, framed by the lower and higher two, is considered’ just right’.
This is a great technique to use if you are trying to influence customers to choose a particular product over two or three others. Note that it loses its impact if you start offering more than four products, as there is too much for the customer to compare.
2. Small prices in small fonts
Customers equate visual size with financial amount, so showing small prices in small fonts helps communicate ‘low price’.
There are some exceptions to this, though - in our value-driven supermarkets, a big, bold and clear price communicates value, simplicity and trust.
3. Remove the comma
Sometimes, it’s just about making the visual as small/short as possible, and this method does just that. Removing the comma in long numbers (e.g., £ 1,400 rather than £1400) helps the brain see £1400 as cheaper, shorter, and easier to read.
4. Highest price first
We often list things beginning with the cheapest first, but it’s been proven that starting with the highest price at the top is more beneficial. This is because as the human eye scans down, there is a perceived loss in quality with each jump. So, customers are more likely to buy a product from the top of the list where they believe they receive good quality at a fair price.
5. Break down the cost
Breaking down a cost per day per day can make a price seem cheaper - especially if you’re selling an annual or monthly subscription. It communicates the value the product/service provides every day.
6. Left digit first
We first pick up the left digit of the price as we read left to right. This is why it’s advisable to price as £2.99 rather than £3.
However, round prices, e.g. £5, £30, can work in certain situations for certain brands—e.g., supermarket brands. Round prices work well for brands that are associated with ‘honest, simple, and straightforward attributes. They can also work in the luxury sector - the thinking here is that the simplicity conveys confident quality. No need to fuss over pounds and pence.
7. Discounts - % or amount?
For discounts below £100, reading this as a percentage discount (e.g., 20%) is more appetising. Under £100, 10% off sounds more enticing than £10 off.
For discounts above £100, use the absolute figure (e.g. £20 off). This is because, once you’re over £100, the discounted figure is likely to be larger and therefore have more impact, eg £20 off.
There are many more approaches that can help communicate price and influence a customer’s perception of value. With all price communication make sure you are clear, you avoid jargon, remain consistent and be honest. This helps you establish brand credibility and build trust.